Eskom and the Zululand Energy Terminal (ZET) have officially entered into a strategic partnership by signing a Heads of Agreement. This collaboration establishes a framework intended to bolster South Africa's gas-to-power program.
Under this agreement, Eskom will act as a foundation customer for the proposed Zululand Energy Terminal, securing access to crucial infrastructure for the import, storage, and regasification of liquefied natural gas (LNG). This development is set to underpin Eskom's ambitious plan to deploy 3,000 megawatts of gas-to-power generation capacity.
Advancing South Africa's energy infrastructure
The project represents a concerted effort to enhance South Africa's energy landscape. ZET, a joint venture involving Vopak Terminal Durban and Reatile Group Proprietary Limited, previously secured a concession from the Transnet National Ports Authority to develop, construct, operate, and maintain this LNG terminal. By diversifying the national energy supply and providing flexible, dispatchable power, the partnership aims to improve grid stability and complement the country's increasing reliance on renewable energy sources.
Project development and strategic objectives
Construction for the Eskom facility is slated for the Richards Bay Industrial Development Zone in KwaZulu-Natal. The project is designed to operate as a mid-merit plant with an expected lifecycle of 25 years. It is officially designated as a Strategic Integrated Project, aligning with the infrastructure development objectives set out in the Integrated Resource Plan of 2025. By utilising a private sector participation model, the initiative seeks to leverage strategic partnerships and project finance to drive industrial development in the Richards Bay area.
Gas as a bridge fuel and operational imperatives
Eskom's leadership emphasises that gas serves as a necessary bridge fuel during the transition to a low-carbon energy system. The dispatchable nature of gas power is seen as an essential component for balancing the grid while intermittent renewables like solar and wind continue to be integrated. Dan Marokane, Eskom's Group Chief Executive, noted that this agreement helps minimise volatility and supports system reliability in alignment with broader national energy objectives.
The partnership is strategically positioned to address several core operational requirements. It aims to ensure energy security and reduce dependence on coal, while simultaneously offering a viable alternative to the costly use of diesel for mid-merit operations. Furthermore, the initiative seeks to mitigate the challenges of an emerging gas cliff by ensuring that natural gas remains a viable enabler for both large-scale power generation and broader industrial applications throughout South Africa.
Oliver Naidu, Director and Project Owner of the Zululand Energy Terminal, welcomed the milestone, highlighting that Eskom's commitment as an anchor customer provides the necessary confidence to advance the delivery of South Africa's first major LNG import terminal.